File Ref. : FSO/BSPU/4/1/1

LEGISLATIVE COUNCIL BRIEF
Helping Business and Promoting Services

INTRODUCTION

At the meeting of the Executive Council on 24 November 1998, the Council took note of the information below.

BACKGROUND

2. The Helping Business Programme began in 1996 when the Secretary for the Treasury chaired a task force to oversee seven pilot studies. The Services Promotion Programme began in 1995 under the aegis of a task force chaired by the Financial Secretary. In 1997, we formed a new organisation, the Business and Services Promotion Unit (BSPU), in the Financial Secretary's Office to take forward both Programmes. The Unit's mission is "To maintain Hong Kong as the best place in the world for business and premier services centre in the region."

HELPING BUSINESS PROGRAMME

3. Helping Business Studies. BSPU works hand in hand with policy bureaux and departments to undertake helping business studies and ensure prompt implementation of improvement measures. We have completed 25 studies/projects over the last 18 months. A list of these projects is at Annex A.

4. Connection with Enhanced Productivity Programme. Transfer of services has been one of the four main strands of activities under the Helping Business Programme. The term "transfer of services" can have different meanings, including contracting out, partnership, corporatisation and privatisation. The present economic downturn, which contributed to the decision to launch the Enhanced Productivity Programme, has accentuated the need to maximize the private sector's capabilities in the delivery of public service.

5. Civil Service Culture. Perhaps the most important factor in ensuring we make Hong Kong genuinely business friendly is securing the right mindset among civil servants. This is an on-going process. As a first step, we organised Helping Business Symposiums in November 1997 and September 1998 for policy secretaries, heads of departments and their deputies. With the assistance of the Civil Service Training and Development Institute, we have welded "helping business" components into the Senior Staff Development Programme. Action is in hand to launch a service-wide campaign in 1999 to further instil a helping business culture among civil servants.

SERVICES PROMOTION PROGRAMME

6. Government Task Force. We published the Final Report of the Government Task Force on Services Promotion with the 1997 Budget, and an update on progress of implementation of its 125 initiatives in October that year. The Services Promotion Strategy Group (SPSG) has since reviewed progress on a "theme" basis i.e. looking at clusters of recommendations relating to individual service industries or specific areas of concern (such as education).

7. Action Agenda 1997-98. In addition to the Final Report's recommendations, SPSG each year recommends an Action Agenda. For 1997-98 there was a 12-point action agenda and a 10-point publicity programme. Among the highlights were -

1. a study on the case for establishing business parks in Hong Kong;

2. a study on the possible need for additional convention facilities;

3. studies of the manpower and training needs of key service industries, the first of which (on the travel and tourism industry) is nearing completion and the second of which (on the information technology industry) will start later this year;

4. an examination of the case for a Credit Guarantee Corporation;

5. publication of a new booklet entitled "Hong Kong : The City that Means Business" promoting our competitive edge to overseas business communities; and

6. a roving exhibition on "Hong Kong at Your Service" touring 13 popular shopping centres at various locations.

8. Action Agenda 1998-99. SPSG endorsed a 15-point action agenda for the current year at its April meeting. To date we have completed four of the initiatives -

1. the Census and Statistics Department published the pilot issue of a statistical digest containing key statistics on service industries in Hong Kong in August;

2. the Trade and Industry Bureau has considered the case for a one-stop small business bureau and decided to establish a Small and Medium Enterprises Office in the Industry Department, as announced by the Chief Executive in his recent Policy Address;

3. the Industry Department implemented a series of measures in August to improve the "after-sales" service rendered to overseas businesses which have established a presence in Hong Kong; and

4. the Information Technology and Broadcasting Bureau has studied the application of electronic commerce in Hong Kong and is implementing an action plan to promote its use.

A report on progress of all the items is at Annex B.

FINANCIAL AND STAFFING IMPLICATIONS

9. BSPU has an annual operating budget of about $25 million for its own staff and departmental expenses plus the cost of short term civil service positions. In addition, BSPU employs consultants using funds from a block vote provided for the purpose.

PUBLIC CONSULTATION

10. The Financial Secretary chairs two consultative bodies to oversee the programmes, respectively the Business Advisory Group and the Services Promotion Strategy Group. Each comprises a mix of leading figures from the private sector and senior government officials.

PUBLICITY 11. BSPU has taken, and will continue to take, active steps to publicise its work to a wider audience by, inter alia

1. an advertising campaign in various business journals on the Helping Business Programme;

2. a television and radio announcement in public interest and a five-minute television mini-series on services supported by posters and internet banner advertising;

3. a web design competition promoting awareness of the service economy specifically among young people;

4. production of videos for use by the Hong Kong Economic and Trade Offices and the Trade Development Council offices on the attractions of Hong Kong as a place for doing business; and

5. a programme of visits to local and international chambers of commerce.

Business and Services Promotion Unit
Financial Secretary's Office
Government Secretariat
27 November 1998
File Reference : FSO/BSPU/4/1/1
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LEGISLATIVE COUNCIL BRIEF
HELPING BUSINESS AND PROMOTING SERVICES

ANNEXES

Annex A	-	Helping Business Programme: Studies Completed
Annex B	-	Progress Report on 1998-99 Action Agenda for Service Promotion

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Annex A

Helping Business Programme
Studies Completed

Study	Achievements
(a) Departmental business study in the Marine Department	Department has become more business-friendly, with simpler and speedier licensing arrangements and other improvements.
(b) Departmental business study in the Trade Department	Department has become more business-friendly, with enhanced performance pledges for processing transactions and other improvements.
(c) Introduction of "Hong Kong Background Information"	A user-friendly information kit for government officials and top businessmen.
(d) Public forms on Internet	Over 650 public forms are now available via Internet, which provides the community with a better and more efficient service on the issue and availability of public forms.
(e) Establishment of a Business Licence Information Centre	Information on all business licences is available at a single location, which provides an efficient and effective service on licence information to the business sector.
(f) Review of lease modification and land exchange procedures	The processing of land exchanges and lease modifications has been speeded up by 30%.
(g) Review of government payment and collection procedures	Payment has been made faster, and collection more convenient through electronic means.
(h) Booklet on excavation permits	An easy-to-use guide on procedures for applicants. The procedures have become more transparent.
(i) Review of application procedures for cross-boundary permits for private cars	Procedures have been streamlined, with less supporting documents required.
(j) Development of a Regulatory Impact Assessment framework	A ready-to-use tool for comprehensive assessment of impacts of regulatory proposals.
(k) Utilities connection and run-ins to completed developments	Developers have been given better control of building programmes enabling earlier completion.
(l) Stocktaking of business related regulatory activities	A useful benchmark has been established to form a basis for future cutting red tape exercises.
(m) Review of Buildings Regulations regarding prescribed windows for bathrooms	The requirement has been made flexible to accord with modern practice in other countries.
(n) Review of hotel and guesthouse licensing	The licensing system has become more business-friendly, with the licensing procedures streamlined.
(o) Review of application for consent to sales of uncompleted buildings	Procedures for processing such applications have been speeded up by 30%.
(p) Review of entertainment licensing for amusement games centres, public dance halls, dancing schools and mah-jong / Tin Kau establishments	One licence (dancing schools) is to be dropped, procedures for other licences to be simplified.
(q) Review of management of public cargo working areas	The fee structure is being simplified; and physical access and landside management are being improved.
(r) Review of licensing of local vessels	The fee structure is being simplified and relevant procedures streamlined.
(s) Identification of activities in the Intellectual Property Department appropriate for transfer to the private sector	Non-core activities identified for contracting out to the private sector.
(t) Research on overseas practices in the licensing and testing of vehicles and drivers	Options for private sector participation have been identified.
(u) Review of application procedures for short-term waivers of land grant conditions	Opportunities to streamline relevant procedures have been identified.
(v) Licensed hotels/guesthouses on Internet	The new service was launched in June 1998 to publicize licenced hotels and guesthouses in Hong Kong.
(w) Extension of provisional licensing to food premises other than restaurants	Operators may start to do business pending the issue of a full licence.
(x) Stocktaking of government contracting out activities	Useful benchmark was established to form a basis for future privatisation efforts.
(y) Stocktaking of public forms	Administration-wide update serves to identify possible target areas for cutting red tape.

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Annex B

Progress Report on 1998-99 Action Agenda for Services Promotion

Aims

• To spearhead strategic thinking about the future development of our service economy.

• To strengthen the institutional support for the services sector of our economy.

• To kick-start worthy industry-specific initiatives that might otherwise not receive the required attention or priority.

• To enhance international recognition and local understanding of Hong Kong's service economy and to foster public support for it.
  

  Serial	Initiative	Lead Agency	Progress to-date (end-October 1998)
  1.	Produce a regular publication containing a digest of key statistics on service industries in Hong Kong.	C&SD	The pilot issue was published in August.
  2.	Establish a panel of overseas experts to advise on the services sector of Hong Kong's economy	BSPU	In his 1998 Policy Address the Chief Executive announced the appointment of a Council of International Advisers comprising prominent personalities in the fields of finance, commerce and industry from all over the world. We will consider how best to seek advice from this body on Hong Kong's service economy.
  3.	Set up a special team in the government to provide support for bureaux and departments to organise international conferences in Hong Kong.	ISD	Funding has been approved for the setting up of a special team as from 1999-2000 to provide support for bureaux and departments to organise international conferences in Hong Kong.
  4.	Develop a strategy to improve the Internet dissemination of government information of particular relevance to the business sector.	ISD	An inter-departmental working group has been formed to map out a strategy to improve the dissemination of government information of particular relevance to the business sector via the Internet. At its meeting on 23 September, the working group decided to hire a consultant to find out the needs of the business sector both locally and abroad with a view to setting up a special home page on "Doing Business in Hong Kong". The working group will then draw up the content and presentation of the materials for uploading onto the Internet in about six months.
  5.	Examine the best overseas practices in manpower forecasting for the next ten to twenty years and consider a manpower forecasting model best suited to Hong Kong.	EMB	Our intention is to establish how Government Bureaux and Departments are carrying out their manpower forecasting at present. At the same time we shall seek to commission a consultant to examine the best overseas practices in APEC and OECD economies. On the basis of the information so obtained, we shall be in a position to follow up on devising a forecasting model for the next ten years.
  6.	Consider the case for establishing a one-stop small business bureau in the Government to help SMEs	TIB	We have examined the issue and come to the view that there are merits in setting up an one-stop SME Office (SMEO) in the Industry Department, as announced by the Chief Executive in his 1998 Policy Address. Subject to resource availability, the SMEO will comprise a virtual office and a physical office and provide one-stop information services including information on services and facilities offered by different departments and support organisations, assistance in setting up new business, licensing information and information on the latest SME-related activities and training programmes. The intention is that it should not duplicate the efforts/services now rendered by other organisations, or incorporate the services now provided by other parties.
  7.	Study how Hong Kong can take full advantage of the growth of the services sector in the Mainland and best serve overseas businesses investing in the Mainland	TDC	The Chinese mainland has been the main target of TDC's services promotion efforts for some time. Through independent research studies and consultations with service industry sectors, a number of service sector opportunities in the Chinese mainland have been identified. These include sectors such as financial services, infrastructure development opportunities, design and marketing services, telecommunications and entertainment, etc. Chinese mainland enterprises are not the only users of such services. MNCs' offices in major cities are also potential customers. The stage of development of Chinese mainland's service sectors is such that Hong Kong service companies can supplement their knowledge and expertise by forming strategic alliance. The Council's 1998-99 Services Promotion Programme includes a number of activities to help Hong Kong companies explore Chinese mainland's growing service market. Infrastructure missions, design services expositions, seminars on capital market, conference on marketing and advertising services, etc. are some of the events being organized. For the coming 1999-2000 programme, again a heavy emphasis will be placed on the Chinese mainland market.
  8.	Commission a consultant to undertake an economic study of Hong Kong's producer services	TIB	The School of Business of HKU has filed an application to the Industrial Support Fund to undertake the study. The study proposes to focus on the contribution of the producer service industries to the development of manufacturing activities of Hong Kong firms as well as the correlation between the growth of producer services with Hong Kong firms' expanded activities in the Mainland. The application is being vetted and the outcome will be known by November/December 1998.
  9.	Consider the desirability and feasibility of transferring responsibility for promoting inward investment to the TDC	TIB	Consultancy firms have been invited to indicate their interest in undertaking the consultancy.
  10.	Improve the "after-sales" service rendered to overseas businesses which have recently established a presence in Hong Kong	TIB	A set of improvement measures was implemented in August.
  11.	Study the application of electronic commerce in Hong Kong.	ITBB	ITBB has devised and is implementing an action plan to promote the application of electronic commerce in Hong Kong.
  12.	Consider the case for improving the bonded warehouse system, and other necessary measures, so as to promote Hong Kong as Asia's wine trading centre	FB / TIB	TIB, in co-operation with TDC, will conduct a consultancy study on Hong Kong as a distribution centre for wine. Preliminary results will be available by early 1999.
  13.	Study the promotion of Hong Kong as an international shipping centre	ESB	Consultants selection process underway. The study is scheduled to start in February 1999 and be completed in six months.
  14.	Organise a tri-partite forum to facilitate exchange of views on Hong Kong's service economy.	HKCSI	The Forum is scheduled for 14 January 1999. It includes a morning session at Island Shangri-La Hotel and a dinner forum at Government House.
  15.	Devise and implement an on-going publicity programme to improve both local and overseas knowledge of Hong Kong as the pre-eminent service centre in the region and the best place in the world for business.	BSPU	Implementation of the Publicity Programme is in full swing. Our services promotion video is running at all major local hotels. The current TV commercial is running on the Airport Express and as part of the inflight programme of Cathay Pacific Airways. We have selected a contractor to help produce a new TV commercial, which should be ready for launch in early January 1999. We are updating the services promotion video and are editing a shorter version. Both versions will be available shortly. We have commissioned TVB to produce an eight part TV mini-series. Each episode lasts five minutes and starting 1 October airs on the Jade Channel before the Late News every Thursday. We are working with the South China Morning Post to organise a Web Design Competition targeting primary and secondary students and youngsters aged 25 and under. We launched the competition on 22 October. We continue to network with Chambers of Commerce and related trade organisations, and are making increasing use of Internet technologies such as web advertisement to promote services both locally and overseas.

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